Oof: the Great Recession cost each household between $50,000 and $120,000, or the equivalent of 40% to 90% of one year’s economic output, according to a study released by the Dallas Fed. In total, that represents an output loss of $6 trillion to $14 trillion.
That’s a combination of lost wealth (like the lost value of a house) and a drop in both current wage income and discounted future wage income from unemployment. Plus, the Dallas Fed notes, there are harder-to-measure consequence of extended unemployment, reduced opportunity and increased government presence in the economy.
And if output doesn’t ever return to trend, the crisis cost will exceed the $14 trillion high-end estimate of output loss.Read More...
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